Sunday, February 23, 2020

Finance For Management Essay Example | Topics and Well Written Essays - 1500 words

Finance For Management - Essay Example 383) This part of the paper seeks to analyse the Jensen argument in 1978, quoted by Pike& Neale that the efficient market hypothesis is the "best established fact in all of social science". Whilst Neale & McElroy (2004) were less categorical "sometimes stock market valuations may look irrational. But in the longer term the markets are efficient processors of information and get valuation about right" Numerous papers have demonstrated that early identification of new information can provide substantial profits. Insiders who trade on the basis of privileged information can therefore make excess returns, violating the strong form of the efficient market hypothesis. Even the earliest studies by Cowles (1933,1944), however, make it clear that investment professionals do not beat the market. It has already been stated that an efficient market is one where the prices of securities fully reflect all available information, but then what are the sufficient conditions for capital market efficiency In an idealized world, such conditions would be the debate about market efficiency has resulted in thousands of empirical studies and literature attempting to determine whether particular markets are in fact 'efficient', and if so to what degree. In fact, the majority of studies and researches of technical theories have gone to the result that it is difficult to predict prices. No wonder, Neale & McElroy (2004) were less categorical, and stated that "sometimes stock market valuations may look irrational. But in the longer term the markets are efficient processors of information and get valuation about right" In addition, the random walk theory indicates that price movements will not follow any trends and so by knowing the past price movements it's not possible to predict the future price movements. All these state that markets are in fact efficient. However, researchers have also exposed many stock market anomalies that seem to be inconsistent with the efficient market hypothesis. Conclusion This section attempts an analysis of Michael Jensen 1978 arguments on the efficient market hypothesis. An attempt was also made to reconcile this statement with Neale & McElroy 2004 statement. From the above analysis, one can gently conclude that trading strategies seem to be widespread among fund managers and there is little evidence that they would generate excess returns in practice (Malkiel, 2003). Researchers have also exposed many stock market anomalies that seem to be inconsistent with the efficient market hypothesis. The end of the year effect, small firm effect is all good examples to this effect. The efficient market hypothesis has been challenged by numerous studies on the grounds that there are often underrreactions or overreaction of stock markets to information. (Baberies et al, 1998; Daniel et al, 1998; Hong and Stein, 1999). Accordingly, in a variety of markets, sophisticated investors can earn

Friday, February 7, 2020

Why should California's leaders save you and your peers a spot in Essay

Why should California's leaders save you and your peers a spot in college - Essay Example I am no exception in this regard. Many of my peers, handicapped by economic status, have received the same benefits. It is a fact that education is the greatest instrument of change in life. As such, a college education is the greatest gift we can receive from our State. I firmly believe that when California’s leaders elect to save us a place in college, they are choosing to make a long-term investment in the future welfare of our society. Financial assistance for higher education will usher in many social and economic benefits, both to us as individuals, and to society as a whole. On the individual plane, a higher education is obviously linked to better employment, increased salaries, financial assets and a higher quality of life, all of which will be passed on to the next generation. The betterment of the individual is synonymous with the betterment of society. In terms of public benefit, an educated workforce increases productivity and consumption, encourages participation in civic and community activities and will reduce dependence on government financial assistance in the long run. In my attempt to give back to society, I have enthusiastically thrown myself into community service, as a member of the Earth Club’s recycling program, and as a volunteer at the Trinity Lutheran Church’s Food Bank, the Peace Vigil, the LA Marathon and Keep America Beautiful. Here again, I have not been an exception – my peers have shared my enthusiasm to make California a better place, in our own small way. We are deeply aware of the benefits we have received from society and are fully committed towards sharing these benefits with those less fortunate than ourselves. A college education will help us to become true contributors to California and to the